Who Knew What When: VW Exec Denies Top Officials Knew of Cheat

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Volkswagen's top U.S. executive apologized Thursday as the emissions-rigging scandal engulfing the world's largest automaker deepened and members of Congress said the company violated the public's trust.

"On behalf of our company, my colleagues in Germany and myself, I would like to offer a sincere apology for Volkswagen's use of a software program that served to defeat the regular emissions testing regime," Volkswagen of America CEO Michael Horn told a House subcommittee.

"This was not a corporate decision. There was no board meeting that approved this," Horn said.

Lawmakers were skeptical of the explanation from Horn, who testified that three unidentified employees had been suspended since the EPA announced Sept. 18 that VW rigged its diesel cars to bypass U.S. emissions standards for clean air. The German automaker admitted that it installed on-board computer software designed to cheat on government tests in nearly 500,000 of its four-cylinder "clean diesel" cars starting with the 2009 model year.

As Horn began his testimony, lawmakers from both parties fondly recalled their first VWs and then laced into the company for betraying the public's trust.

Rep. Fred Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, said Volkswagen "has long enjoyed an almost cultish following dating back to the Beetle. But through the years something apparently became rotten in Wolfsburg and cheating and betrayal became part of the VW game plan."

Rep. Tim Murphy, R-Pa., chairman of the subcommittee on oversight and investigations, said "the behavior to which VW admitted represents a fundamental violation of public trust."

Horn, a 51-year-old German and veteran VW manager who took the reins of the brand's American subsidiary last year, told Congress that VW plans to withdraw applications seeking U.S. emissions certifications for its 2016 model Jettas, Golfs, Passats and Beetles with diesel engines. That raised questions about whether a "defeat device" similar to that in earlier models is also in the new cars.

By withdrawing the applications for the 2016 models, VW is leaving thousands of diesel vehicles stranded at ports nationwide, giving dealers no new diesel-powered vehicles to sell. It wasn't immediately clear when VW would refile its application.

Horn said the company does not yet have an approved recall plan for cars that have the defeat device, and that any fix for customers could take "one or two years" to carry out. Each of the nearly half million cars will require five hours to 10 hours of work, a potentially significant burden on dealers.

"We know we can fix these vehicles to meet emissions standards," Horn said, adding that a potential fix would likely have a "slight impact on performance. One or two miles of top speed might be missing."

In Germany, prosecutors searched VW headquarters and other locations Thursday for material that would help clarify who was responsible for the cheating. The searches were intended to "secure documents and data storage devices" that could identify those involved in the alleged manipulation and explain how it was carried out, prosecutors said.

It was unclear what the newly disclosed device found in some VW models does. Liz Purchia, a spokeswoman for the Environmental Protection Agency, said VW recently gave the agency information on an "auxiliary emissions control device." The EPA and California Air Resources Board are investigating "the nature and purpose" of the device, she said.

VW said such devices can sense engine performance, road speed "and any other parameter for activating, modulating, delaying or deactivating" emissions controls.

The lack of certification is bad news for American VW dealers who hoped to put the new models on sale soon. For some dealerships, the diesel models accounted for about one-third of sales.

Tom Backer, general manager of Lash Volkswagen in White Plains, New York, said his dealership had lost three deals with potential buyers because he could not get the new cars.

"It's definitely a stain on the brand's image," he said.

VW acknowledged the deception to U.S. regulators on Sept. 3, More than year earlier, researchers at West Virginia University published a study showing the real-world emissions of the company's Jetta and Passat models were far higher than allowed. The same cars had met emissions standards when tested in the lab.

VW was able to fool the EPA because the agency tested the cars on treadmill-like devices called dynamometers and didn't use portable test equipment on real roads. The software in the cars' engine-control computers determined when dynamometer tests were underway. It then turned on pollution controls that reduced the output of nitrogen oxides that contribute to smog and other pollution, the EPA has said.

Only when the EPA and California regulators refused to approve VW's 2016 diesel models for sale did the company admit what it had done.